Harvey Bale

1

The View of Pharmaceutical Manufacturers

• Harvey Bale
• Director General, International Federation of
  Pharmaceutical Manufacturers Associations
  (IFPMA) and President, Pharmaceutical Security
  Institute (PSI)
• International Conference on Combating
  Counterfeit Drugs Building Effective
  International Collaboration

2
Why Now is the Time for Concerted Action

• It is NOT because counterfeit sales are 5, 6,
  7 or even 10 of world pharmaceutical sales we
  do not know the proportion these and other
  figures are not supportable -- and are
  misleading.
• The most important fact is that we have a global
  emergency, but also a counterfeiting gap
• In developing and emerging countries in Africa,
  Asia, Eastern Europe and Latin America, the
  problem is already great patients in these
  regions regularly encounter fake medicines. This
  is unacceptable.
• And in developed countries, the risks to patients
  today are very small, but the counterfeit trade
  is very growing fast and this is also
  unacceptable.

3
Good Data Are Lacking But the Problem is
Getting Worse

• FDA has recently seen an increase in
  counterfeiting activities as well as a more
  sophisticated ability to introduce finished
  dosage counterfeits into the otherwise legitimate
  drug distribution channels (FDA, 2003)
• Both original and generic medicines are
  counterfeited (EGA, 2006)
• Counterfeiters can and do target any medicine
  (WSMI, 2006)
• Consumers purchasing drugs directly from INTERNET
  websites have no idea of how or where the
  counterfeit drugs they are buying are
  manufactured (Head of Pfizer Global Security,
  quoted in The Shanghai Star, 2004)

4
Continuing Increase in the Detection of
Counterfeit Medicines (PSI, 2006)
5
Continuing Increase in the Detection of
Counterfeit Medicines (PSI, 2006)
6
Theft of medicines is a growing problem, and
stolen medicines can be re-sold in an adulterated
state

• A major pharmaceutical robbery has resulted in
  the theft of 100,000 worth of prescription drugs
  from a Hamilton pharmacy. The theft included
  painkillers and controlled substances, but also
  "tens of thousands of dollars" worth of other
  brand-name medications, including refrigerated
  insulin and vaccines.
• "Huge Drug Haul from pharmacy 100,000 worth of
  drugs stolen," Hamilton Spectator, 8 February
  2006

7
Continuing Increase in the Detection of
Counterfeit Medicines (PSI, 2006)
8
Counterfeiting is becoming a large problem in
Russia

• Russian President Vladimir Putin recently raised
  serious concerns about counterfeit medicines on a
  visit to the office of the Prosecutor-General.
• Calling the pharmaceutical market situation
  "extremely negative," Putin noted that "The
  turnover in counterfeit medicines is beginning to
  pose a real threat to the health of the nation
  and the widespread presence of counterfeit goods
  undoubtedly discredits Russia as a reliable
  business partner."
• ("Russian President Sets Out Prosecutor's Tasks,"
  BBC Monitoring International Reports, 3 February
  2006)

9
Another example -Taiwan

• Around 10 of total pharmaceutical market
• 2030 for some branded products
• Erectile function drugs
• Weigh loss drugs
• Hair loss drugs
• Vitamins
• Glucosamine
• Frequently found best-seller drugs
• Anti-ulcerants
• Anti-Hypertension
• Tropical Corticosteroid
• Hypnotics

10
Counterfeit Medicines Some Key Aspects

• Countries are the worst affected where regulatory
  structures are weak, and control and oversight is
  difficult
• Regulation and organization of the distribution
  system is often weak
• Branded and non-branded generics are also widely
  counterfeited as well as OTC price not a
  warning-indicator of fake drugs
• Medicines prices vary widely across the world,
  and parallel trade is widespread, allowing
  counterfeit medicines to enter the supply chain
• Medicines counterfeiting has not been a high
  priority for many countries (cf., illegal drugs,
  pornography, etc.)
• In many countries, the risks of prosecution and
  penalties levied for counterfeiting are
  inadequate
• Low risk/high returns on investment in
  counterfeit drugs
• The way in which medicines reach the consumer is
  also different from other goods who knows
  whats in the box or blister pack?

11
Counterfeit Medicines More Key Aspects

• All measures that reduce the profit margins for
  manufacturing fakes, such as reducing the price
  and increasing the availability of genuine,
  quality assured drugs, will make counterfeiting a
  less attractive criminal activity. (BMJ, 2002)
• This may help but
• There might even sometimes be a Greshams Law
  at work i.e., bad drugs drive good drugs out of
  local circulation. Good drugs may be withheld
  and diverted to more profitable markets.

12
Technology Responses to the Problem (?)

• Industry uses where possible feasible chemical
  and electronic technology tools (bar code,
  holograms, RFID, etc.)
• but not permanent solutions
• can eventually be overcome
• The German Pharma Health Fund offers a low-cost
  field technology to developing countries to
  assess product quality
• Sophisticated technologies are not universally
  available or feasible
• need to be seen as supplementary to action in the
  customs, regulatory and legal/penal framework

13
Recent Industry Actions US/PhRMA

• In 2003, PhRMA established a 5-day voluntary
  reporting system for counterfeit drug incidents
  to the FDA.
• In 2005, the Partnership for Safe Medicines (of
  which PhRMA is a member) launched the first
  consumer email alert system on counterfeit drugs.
  It is the only member of the FDA's Counterfeit
  Alert Network that broadcasts directly to any
  desiring member of the public.
• PhRMA's State Government Affairs division lobbies
  quite regularly in regional governments for
  strong pedigree bills to secure the supply chain.

14
Recent Industry Actions Europe/EFPIA

• Pro-active approach
• Corporate security (global security agenda
  including security devices, customs selection
  techniques, etc)
• Public/private Partnerships (trading standards
  office, customs, police, law courts, etc)
• Communication of list of contact person in
  companies (LEEM).
• Reactive approach
• Application for customs action, as per new EC
  Regulation n1383/2003 (seizures made more
  effective and cheaper, and wider coverage)
• Investigation, sharing of information,
  enforcement actions and tighter control of
  supply chain

15
Recent Industry Actions Asia/JPMA

• In Japan, MHLW strict controls lead to low
  incidence of CF in the local market (except
  personal imports).
• JPMA estimates counterfeiting to be near 20-30
  in Asia.
• JPMA fosters international cooperation with other
  Asian countries
• - Training in pharmaceutical quality
  assurance by member companies
• - Dispatch of experts for technical transfer
  
• - Supply of HPLC to Cambodia and Laos, etc.

16
Recent Industry Actions South East Asia/PREMA

• Effective partnerships of industry with Law
  Enforcement
• and Regulatory Agencies in South East Asia
• Enforcement against manufacturers of counterfeits
  (China and Thailand)
• Enforcement against distributors of counterfeits
  (Malaysia and Thailand)
• Enforcement against pharmacists selling
  counterfeits in Taiwan
• Sharing expertise and training with authorities
• Thailand, Malaysia, Indonesia, Cambodia and
  Vietnam

17
Recent Industry Actions Latin America/FIFARMA

• Public-Private collaboration with PAHO for
  2004-2006 action plan
• Cooperation agreements between the industry and
  the authorities already in place in Colombia,
  Argentina, Brazil, Paraguay and Venezuela
• In some countries (Argentina, Colombia), lobbying
  is being made in Congress to obtain the category
  of criminal offense and to increase penalties.
• The first Latin American Forum on CF was held in
  Venezuela with the support of FIFARMA and IFPMA
  in 2005.

18
International Action Pharmaceutical Security
Institute

• PSI established in 2001
• Members are 21 RD-based pharmaceutical
  companies, mainly Europe, US-based
• PSI collects, analyzes and disseminates
  information to be shared with authorities
• to prompt appropriate enforcement activities
• Members commit resources to work with
  investigators in national DRA and law enforcement
  agencies
• PSI also works closely with Interpol and the WCO
• Ex. ongoing joint project to support
  anti-counterfeiting efforts in Africa
• PSI and IFPMA have supported the OECD/WIPO
  project on piracy and counterfeiting

19
International Action

• Generic Industry EGA
• EGA committed to increase security in the supply
  chain.
• The Identification Developments Network serves
  to exchange updated information on global
  standards for identification, and currently
  includes 14 EGA members.
• Contributed to the development of standards for
  identification of pharmaceuticals in Europe
  (Voluntary Application Guideline).
• EGA is an active member of the Council of Europe
  ad hoc Group on Counterfeit Medicines.
• Self Medication Industry WSMI
• Committed to development and design of systems to
  improve anti-counterfeiting packaging and
  procedures

20
Obstacles to Overcome

• Police and judicial priorities are elsewhere
• Ignorance about the scope of the problem and its
  extent in sector of generic products
• Problem is not recognized as more than a
  commercial issue association with branded
  products
• Confusion of counterfeiting issue with IP issues
  (piracy)
• Sharp increase of uncontrollable INTERNET trade
  (including API)
• Priority in global monitoring and control by
  police authorities given over to illegal drugs
  (heroin, etc.)
• Refusal of some countries and companies to admit
  scope of problem
• Over-reliance on technical devices -- on the
  assumption that technical devices will solve the
  problem
• Insufficient resources within countries and also
  in WHO

21
What We Need to Work Toward

• Policymakers and enforcement authorities to take
  lead and prioritize the fight against
  counterfeiting of medicines -- political will to
  act now
• Enact and enforce tougher criminal penalties in
  national legislation
• Counterfeiting must be considered a serious
  criminal offense
• More appropriate resources to be allocated to
  investigation and law enforcement
• Tighter, compulsory control of the supply chain
  -- tackle counterfeiting at the source of entry
  into the distribution chain
• Manufacturers, repackagers, wholesalers,
  distributors and pharmacies -- are all
  responsible
• Repackaging to be reconsidered or further
  regulated

22
What We Need to Work Toward

• International police collaboration to be
  operative, not only informative (especially with
  authorities in source countries)
• High level commitment from all stakeholders with
  regularly scheduled information exchanges-
  support formation of international task force of
  key stakeholders
• Harmonization of reporting forms, in line with
  the WHOs Rapid Alert System
• Seriously consider establishment of controls to
  the INTERNET trading in counterfeit medicines
• Engage in a public awareness campaign on a
  global scale that recognizes that counterfeiting
  is a public health emergency